My number one tool is price per square foot, then it’s by comparison to like kind sold properties.

Sellers now have the pictures and stats on surrounding properties from ridfen and zillow. Most interview a group of agents. After price it’s presentation. Buying a listing is never a good idea.

What i like is to list at market value with the agreement to lower the price if it doesn’t sell in two weeks. My goal is that if it gets showings but no offers it’s 5% over priced, and no showings 10% over priced, I will do 5% increment reductions.

My Queen Ann listing is something near and dear to my heart. It is a property of exceptional value. It has the price reductions, but it will take a special buyer at any price.

Spot on Civil.

Also Greg, you can toot your horn all you like about pendings.

Basic market psychology has changed from “OMG you didnt buy a house?? and you are renting?? you are just throwing away money” to “"golly", I wish I had rented for the past 5 years and saved up for a downpayment, whatever money I put in my house is going to disappear after transaction costs”.

“The crowd here should like it because they lop off some of the NWMLS published demand”: are you implying that “the crowd here” would rather have their alleged biases reinforced by low demand numbers than work with accurate, vetted statistics — instead of, perhaps, the assurance that open house traffic is up or your claim a few days ago that the market has suddenly “gone from 0 to 60″?

Generally speaking, Greg, we dig solid data. We don’t want anything lopped off. And we are avidly aware that you are trying to sell us something.

1. May Reporting Roundup (2008) – 330 comments
2. House Valuation Workshop – 232 comments
3. Official Word on Microsoft Layoffs – 218 comments
4. June Reporting Roundup (2008) – 206 comments
5. Predictions: 2007 Revisited, 2008 Prognosticated – 186 comments
6. Breaking: House Votes Down $700B Bailout – 179 comments
7. More Unfounded Starry-Eyed Nonsense from Lawrence Yun – 173 comments
8. Who gives a RA about the banks, anyway? – 168 comments
9. Sell at a loss, or refinance and wait it out? – 167 comments
10. (tie) What’s Your Housing Bust Strategy? – 164 comments
    Recent Spike in “Pending” Sales Due to Change in Definition? – 164 comments

Not much further and we can break into the top 5! :^)

Greg I just read that retails sales unexpectedly dropped this month maybe that consumer is not as confident as you think.

Hmmm, perhaps they’re not buying crap from the stores to save up for a down payment?

Ok! That’s my story and I’m sticking to it!

I do tell every one that prices are declining and to get rid of the property. Then you have a Catch 22 of what the numbers say. Several properties are 10% below what the CMA says and they are still lingering. When an agent starts going 20% below market CMA there is activity in any market.

There have been deals where a property, listed below market, got the fourteen offers only to come back onto the market and languish. Some agents have used the term that a property will get “bid up” to market price and I have yet to see that happen.

In my opinion the structured price reduction is the best.

What’s really best is if buyer’s agents would make offers on properties a client is interested in. My main rant is that buyer’s agents look at list price as a retail sticker when it’s all negotiable.

Saying it’s the listing agents job to price the property below market so the buyer’s agent has an easy target is doing both agents job. Buyers waiting for property prices to come down is going to take a long time.

If an agent has a buyer it should be their job to find a property that works for the buyer. I don’t think we are all here to make a buyer’s agent job as easy as we can.

Here’s how the sales aspect of the buyer’s agent works. The buyer’s agent is sitting on the computer checking prices every morning. One morning a special super low priced bargain comes on as a new listing and the agent breathlessly gets on the phone to the buyer. They will say and I quote, “There is a steal of a deal on the market today. You’ve got to jump on it or it will be gone this afternoon, skip work and let’s go look at it.”

This is exactly why people get the idea all they have to do is to check the computer.

an agent like yourself who will browbeat them into listing their home at a price to sell

It depends on what’s in the seller’s best interest.

A Real Estate agent is not a commissioned sales person. An agent should advocate for the clients wishes and in thier best interests. Some times that means the best price. Some times it means to get rid of it.

Got it, but please put some cohesive thoughts together.

That’s why foreclosures are potentially so devastating. They can happen in numbers that would overwhelm what would otherwise be the normal activity.

Yes the 3000+ people who bought homes this month are whacks, and the 40 if that loyalists here have it all right.
40 is generous

Good night folks.

re: 145

I used to forecast market conditions for one of the largest homebuilders in the country, including the interelation between metros nationally. I also worked in finance modeling exchange rates and stock indexes.

Do you have any sense for what to expect in the way of upcoming new construction markets? I’ve heard several theorize that once current inventory is sold through (absorbed), there could be an 18-24 month lag before substantially more ready to sell inventory is on line.

Many (most) builders have credit problems and aren’t buying up land?

Let us know if you have any insights.

Good to know. You do have market analysis experience. As I noted, I agreed with several of your conclusions.

Greg,
I think that’s more an indication that you’re a good agent rather than an indication that buyers are everywhere.
Some sellers aren’t lucky enough to have an agent like yourself who will browbeat them into listing their home at a price to sell, and their homes linger on the market, seemingly forever.

Here’s the deal though. Sales increase every year. I did look at pendings and there were many that went from pending inspection back to active. There has been some heavy negotiating this year.

Let me also say this about sales strategy. If you price a property low enough it will get multiple offers. I know we are in a market where that makes sense to do. What makes me reluctant is that it is many times a poor strategy for the seller. It’s a sales technique.

Trendgraphix is a a sales tool. It’s sold as a sales tool. Windermere has their agents pay for it. Some agents use it in a CMA presentation to show market “trends.”

The CMA is specific to a house in a neighborhood. Showing what King County did means every little, sorry. Actually in Seattle showing a 1 mile radius can be very deceiving. 1 mile is acceptable in appraising as long as the comparable is indeed comparable, but it needs to conform to other like kind properties.

Am I rambling too much? Stop me if you’ve heard this before.

All of the area pendings or solds are interesting to look at, but detailed analysis on a broad scale is worth nothing. A Real Estate transaction is between two individuals. They are to have a meeting of the minds about the exchange of consideration, most times cash, for a specific property.

When you hire a Real Estate agent your agent should be able to research beyond any doubt the value of the property. They then negotiate the best terms, in your best interest.

That’s it. I can know what the Real Estate market will do in the next three years and keep that in mind while helping a person, but Real Estate is a snap shot in time. It’s fluid. Nuances change hour to hour. Paul Volcker can get up in a meeting before Congress and say he doesn’t care about inflation. Obama can make a speech in the morning that will spike interest rates to 13%.

I’m just saying.

I used to forecast market conditions for one of the largest homebuilders in the country, including the interelation between metros nationally. I also worked in finance modeling exchange rates and stock indexes.

Trendgraphix does a manual correction process of NWMLS data. Their numbers are always conservative to what the NWMLS publishes. I actually have more faith in their corrected numbers than the released data, and since their numbers always come out more conservative, I don’t see any harm in using them. The crowd here should like it because they lop off some of the NWMLS published demand.

Well, the way I see it there are 3 separate issues.
1. Buyers are making purchases (homes going pending)
2. Why are the buyers buying homes?
3. What is causing the widening gap between pending and closed?

I asked the second question in 79 above. Tim as asked question #3 several times in the last 2 weeks.

I don’t see any way to debate #1. I’m not here to convince these sales are happening. They are happening.

#2 and #3 have been hashed about pretty good.

Now as for recovery, I have offered no opinions for prolonged long term recovery. I challenge you to find one. We’re discussing the spike in April pendings, and I have shared additional information on the price range here the majority of these pendings are happening.

Next as for credibility, I don’t worry too much about your opinions. BTW, exactly what do you do for a living that makes you such a real estate market expert?

Lastly, I have made it clear here that I have deep concerns for overall and lasting recovery. There are plenty of local and national issues that will create huge pot holes to healthy recovery. I agree with your statement about real recovery starting with normalizing buyer behavior. I also agree that the move up buyer is lacking in this market. I have said this many times in many ways — and as far as I know — introduced the concept of market compression to this blog, which I’m sure we’ll be cussin’ and discussin’ in the future.

So, in short I don’t and won’t try to convince anyone that demand is up. If you’re so myopic that you can’t see numbers in front of you, we’ll as I said above, “You can’t argue with the ignorant”.

Argue about what it all means, OK. But look at the result and deny it?

The weekly rise in pending numbers may end this week, or it may go on awhile. I’ll make you a deal, if they go up — or they go down, I’ll let you know what happens.

BTW, you should know I had 14 offers on a recent listing.

Let me turn this around because pending sales mean nothing in today’s market place. Some people want or need to buy and this is the window to do that. Of course I would have waited until August, but if you have kids it’s hard to get settled during the start of a school year. Mom, dad, and the kids are the most motivated buyer pool.

In addition there is a huge increase in new construction sales with 2.87% to 4% special builder financing. Which brings us to the banks.

Yes it was the end of the foreclosure moratorium, along with Wells Fargo leaking the profit report, and the leaking of the stress test results. The economy looked good there for about a month. Banks are talking about giving back money or they don’t need money. BECU claimed a 20% increase in deposits.

Then Warren Buffet hit the talk show circuit talking about the end of the recession. As an aside Warren is looking more and more like P.T. Barnum to me. He has the guys dressed as Fruit of the Loon, cavemen, and a talking lizard.

To give banks a further boost President Obama gets up and tells 9 million Americans they can save money if the just refinance their homes.

I find the housing activity unremarkable given the amount of good news thrown around. It’s hard to remember now but we had a full recession way back in January.

Greg… Here are the actual numbers from the NWMLS:

King County
Pending Sales Reported for April
2114 Residential Resales
351 Residential New Contruction
532 Condo Resales
82 Condo New Construction
TOTAL PENDING=3,079

I’m not sure who puts the numbers in for Trendgraphics but they don’t match up with the numbers put out by the NWMLS.

As usual: Statistics not complied nor published by NWMLS

“Like it or not, buyers are on the streets making these purchases.”

So here is the problem for me – the beginnings of a real estate recovery will require some normalcy in home buying behavior – such things as move up buying or selling a home at a profit). How can a recovery take hold if no one is making a profit?

What we are seeing is the handful of people who are the sidelines taking their shots at what inventory is out there. (Has anyone seen existing homeowners selling and buying?) That population is not sufficiently large to sustain anything.

The other big barrier to recovery here – California. The people who drove up prices here – all those Cali escapees – they’ve stopped coming. In fact, we have already begun to lose population to SD, LA and SF since we are no longer less expensive and we no longer have more jobs than any of those areas.

Greg, if you are going to convince people on this site of the questionable demand (to some of us), you will need to explain how it is happening. Who are these people? Why will Seattle prices stabilize above San Diego? Who is hiring? What company is relocating people to Seattle and bringing homebuyers?

Absent any rationale, your statements are implausible.

Taking it further, ignoring any claims of a RE recovery by interested parties (realtors and all the Lawrence Yun progeny) is simpy common sense. Your opinion can’t be trusted Greg, with all due respect, because you have the most to gain by convincing others of your point of view.

I saw some houses this past weekend, one that I liked (though not at current price), and the realtor couldn’t help but toss me some lines about how the houses are getting snatched up. The automatic attempt to create urgency and a sense of scarcity will have me look with another realtor next time.

http://www.workingforyou.typepad.com//.a/6a00d83451cc6269e201156f8c9bd0970c-popup

Weren’t there a number of real estate auctions in the Mar/Apr time frame? I may be making up a memory, but I recall that several developments were put up in bulk auctions.

That would explain a jump in pendings.

Anyone buying into or selling “consumer confidence” (ie Greg) either has an agenda or has no understand of the reality out there. U3 unemployment may be 8.9%, but U6 in Washington State is 16%+

Look at today’s MSNBC story in travel on how everyone is cutting WAY back on vacations – except for higher income households who are bargain hunting.

When you consider – tighter credit for indviduals and small businesses, U6, no household equity to trade up from and people on eggshells from fear of more Boeing/Microsoft layoffs – who exactly are these confident people driving this spring jump in demand???

Would not explain pendings. Auctions are not listed properties, therefore would not appear pending.

Like it or not, buyers are on the streets making these purchases.

That would explain a jump in pendings.

Anyone buying into or selling “consumer confidence” (ie Greg) either has an agenda or has no understand of the reality out there. U3 unemployment may be 8.9%, but U6 in Washington State is 16%+

Look at today’s MSNBC story in travel on how everyone is cutting WAY back on vacations – except for higher income households who are bargain hunting.

When you consider – tighter credit for indviduals and small businesses, U6, no household equity to trade up from and people on eggshells from fear of more Boeing/Microsoft layoffs – who exactly are these confident people driving this spring jump in demand???

339 of the 2009 SFH pendings in April 09 on Trendgraphix are NEW CONSTRUCTION pendings. (King County)

King County NC for April 2009 = 1878 active, 339 pending 5.5 MOS based on pendings

Monthly NC active/ pending/sold counts since September 2008:

Month Active Pending MOS Closed MOS (closed)
9/08 2231 190 11.7 227 9.8
10/08 2274 126 18.0 214 10.6
11/08 2251 142 15.9 107 21.0
12/08 2154 118 18.3 173 12.5
01/09 1954 135 14.5 85 23.0
2/09 2113 183 11.5 122 17.3
3/09 2019 231 8.7 172 11.7
4/09 1878 339 5.5 163 11.5

(statistics from trendgraphix from NWMLS, but not verified or published by NWMLS)

I didn’t realize until now that there are a huge number of new construction homes included in the monthly pending numbers.

I don’t have any opinions yet on what this means.

Leverage is good in investment ROI leveraging to provide a better return, and less risk.

We’re just two opinions on the opposite sides of the river, but I do appreciate youir candor.

What is leverage when price plummets? Deleveraged?

I’d rather put my down payment (even 3.5%) in a cash can; at least it doesn’t disappear and I can maybe buy in:

a. when I’m good and ready
b. or never, what’s wrong with renting on the cheap?

As a rentor though I’d do thorough credit checks on my landlords; I just went on a coffee date with a gal that’s renting and her landlord is about to foreclose and she gets evicted. She’s horrified.

I hear Snohomish government workers recently took 5% cuts in hours and I’m hearing other local government across the board pay slashes too….none of underemployed gets tracked in unemployment rates though.

Maybe the Stimulus Money to local governments will stretch longer now…LOL

First, sub-prime ended back in 2008.

Second, no investment properties here.

Third, do you really think someone is better off who put 20% down if afterward the market goes down 13.5 or 23.5%? I suggest you Google the term leverage, and then maybe you’ll understand what happens if values go up or down on a leveraged investment.

Anything else you’d care to speculate about or guess wrong on? ;-)

Speaking of employement news one contractor for MS reduced all of their employees salaries by 10%. Khmmm.

What happens when the house potentially/likely crashes another 13.5% or even 23.5% down the road very soon? Ya hand the keys back to the bank for tax payer assistance? Ya refinance to the magic new 0.5% FHA interest rate with your wonderful 600 credit rating….LOL

Sounds like Gary and Kary don’t want the subprime mess to ever end?

How many investment homes did they buy in error the last few years?

Thank God I’m debt free….LOL

I can’t attest first hand that PPP’s are really putting those refinancing into a pickle with declining housing values. They are making it exceptionally difficult to refi because a number of people roll costs (including PPP’s if they don’t have the time to let it expire) into the new loan amount (higher). LO’s who sold these loans are having difficult discussions with their clients (if those refinancing are even using the same loan officer again).

.

RE: deejayoh @ 107 –

Actually deejayoh, most buyers will only need at $14,000 down payment (3.5% FHA). VA and rural farm loan programs are still available at zero down.

By Kary L. Krismer @ 109:

RE: deejayoh @ 107 – A $400,000 house would require a $14,000 down payment.

So $8k is an even bigger incentive, if it gives you back half your down payment. that just reinforces my belief that this is driving sales

However – Interesting report from the “Washington Office of Budget and Policy” I heard about on the radio this morning

Nationwide, 77 percent of subprime loans with adjustable rates have already seen the first reset of the interest rate.13 In Washington State, only 67 percent have already been reset. In other words, 33 percent of subprime adjustable-rate mortgages in Washington State are still at the original interest rate (Figure 4). This is a higher rate than all but two states (Utah and Oregon).
This is problematic because the subprime mortgages most likely to go into delinquency or foreclosure are those with adjustable interest rates. Homeowners with these loans see significant increases in their mortgage bill from one month to the next and the additional cost can lead to late payments and eventually, foreclosure. Many Washington homeowners are still awaiting that increased cost. In the next 12 months, it is expected that interest rates will reset on 23 percent of subprime adjustable rate mortgages in the state, a higher share during that period than nearly every other state (Figure 4).
Problems for strapped homeowners can be exacerbated by prepayment penalties and large loan balances. Thirty-two percent of subprime mortgages in Washington State have prepayment penalties currently in force, a higher percentage than nearly every other state. And only 10 states have larger average subprime loan balances.
These statistics do not necessarily suggest that the Washington State situation will become as severe as Florida where 1 of every 10 mortgages are seriously delinquent or in foreclosure, but they do suggest that the worst for Washington State may still be ahead.

Patient, don’t forget that although this site is a source of information and intellectual exercise for many, it also may have some collateral promotional benefit for some. Even in good markets most agents spend a fair part of their time promoting their own business. And even in a good market, many of the same names would show up in the comments. I’m not being critical, here. I’m just stating a fact. I don’t think it’s a coincidence that some people use their real names and faces on this site. Take Greg for example. I don’t know if that’s his name, but I’m pretty sure that’s his face. Of course, One Eye is only a nick name, but my wife will tell you I am kind of a dog. And although I’ve never been a sheperd, I do have a little german blood in me.;-)

Yes if prices decline further and the economy gets worse we’ll see more SS and REO.

BTW, even my statement above isn’t quite accurate, because I had a bankruptcy sale this month where the buyers didn’t buy until their other place sold, and they specifically placed their property on the market to buy my bankruptcy listing. So the bankruptcy sale was the second sale. It won’t generate a third sale, however. That’s the end of the chain.

What you’d really need to do is track total sales, back out short sales, REOs, bankruptcies and also any sale where the seller didn’t net maybe $12,000-15,000 for a down payment on a new house, and even that would assume they didn’t have another source for down payment.

The reason we are seeing so many REOs and short sales in Cali and other bubbly places is that prices dropped there earlier than here in Seattle. Now, as more sellers are underwater due to declining prices, don’t you think that will lead to a much larger portion of REO and SS going forward?